Target expanding grocery options in San Antonio

Chantel Maldonado shops at the Target store at the Rim shopping center Wednesday March 27, 2013. The Target store there is one of the first in San Antonio to receive the company's expansion of its fresh produce an grocery concepts.

Photo By Photos by John Davenport / San Antonio Express-News

Chantel Maldonado shops at the Target store at The Rim, one of the first in San Antonio to receive the company's expansion of its fresh produce and grocery items. It typically takes 10 to 13 weeks to complete the work.

Photo By JOHN DAVENPORT/SAN ANTONIO EXPRESS-NEWS

Amy Elkins shops at the Target store at the Rim shopping center at La Cantera Wednesday March 27, 2013 with her boys Evan Elkins,5, (on cart) and Asher Elkins,3. The store is one of the company's first in San Antonio to receive expansion of its fresh produce and grocery concepts.

New signage leads shoppers to the grocery section at The Rim's Target store.

Photo By JOHN DAVENPORT/SAN ANTONIO EXPRESS-NEWS

New signage leads shoppers to the grocery section at the Target store at the Rim shopping center at La Cantera. The store is one of the company's first in San Antonio to receive the expansion of its fresh grocery and produce concepts.

Photo By JOHN DAVENPORT/SAN ANTONIO EXPRESS-NEWS

Apples on the shelf at the Target store in the Rim shopping center are ready to be snapped up by customers Wednesday March 27, 2013. The store is one of the first in San Antonio to receive the company's expansion of its fresh produce and grocery concepts.

Target soon will offer more produce and grocery items at nearly all its San Antonio stores, adding to the list of competitors vying for market share in the area.

The Minneapolis-based retailer this week unveiled the redesign of two stores at The Rim and The Forum shopping centers, which now include the company's so-called PFresh concept.

Without requiring new construction, the new layout offers customers about 90 percent of the food items that they can find in the grocery aisles at any of the area's five SuperTarget locations. The remodel, which Target has undertaken at about two-thirds of its stores across the United States, also includes new displays and expanded assortment in the health and beauty, houseware and baby sections of each store.

Unlike SuperTargets, which house a full grocery store along with general merchandise, traditional Targets carry a limited amount of grocery items, most of which are pre-packaged and private label. The expanded layout features more baked, dairy, produce and meat items.

“When we talk about our guest, we know her time is limited and she needs the ease of being able to shop” in one place, said Shelley Besson, district team leader of 12 Target stores in the San Antonio area. “A lot of our refreshes allow her to find exactly what she needs.”

After completing the redesign at The Rim and The Forum on Sunday, Target began similar makeovers at its New Braunfels, North Park and Westover Hills stores. It typically takes 10 to 13 weeks to complete the work, depending on the complexity of each location, Besson said.

Target introduced the fresh food layout at a new location in Alamo Heights that opened last fall — about three years after the company launched its national PFresh expansion. Besson said Target delayed remodeling its stores here because most already carried a wide selection of food items.

But supermarket analyst David Livingston cited one reason why the company waited so long to remodel its San Antonio locations.

“Three letters: H-E-B,” he said. “I think they know what they're up against, and I doubt their expectations will be very high.”

While redesigned Targets do carry some meat, produce and other perishables, Livingston said the selection is nowhere near the amount offered at traditional grocers such as H-E-B, which has long dominated the San Antonio market.

He added that Target's grocery aisles similarly were dwarfed by those at Wal-Mart, which recently announced that 55 percent of its U.S. sales came from groceries.

“Who would (you go to Target) to buy groceries when you have H-E-B and Wal-Mart in the same market?” Livingston asked. “They wouldn't be able to sell enough perishables to make it worthwhile, and it would just end up rotting on their shelves.”

However, at Target's store at The Rim on Wednesday, shopper Amy Elkins welcomed the new layout.

A 31-year-old mother of two, she said she often drives in one direction to grocery shop at an H-E-B Plus close to her home and then travels in the opposite direction to run other errands near The Rim.

“I always had to expect not to find the fresh items (at Target), and I'd adjust my shopping accordingly,” Elkins said. Now, “I'll just manage with what they have here instead of running around all the time.”

H-E-B would not comment on Target's grocery expansion in San Antonio, but Livingston said the locally based grocer's main advantage is its well-known approach to tailoring each store and its selection to the demographics of the community around it.

“All the Targets are cookie-cutter that I've seen,” he said. “The PFresh you see in North Dakota is the same you'll see in Texas.”

The Target at The Rim, however, did feature Hispanic brands, such as Goya, that Besson said were geared specifically for the San Antonio shopper.

Nevertheless, Target doesn't want to become the region's top grocery destination, said John Dean, a grocery analyst based in Minneapolis.

Instead, the company wants customers to make more frequent visits and leave the store with fuller baskets, which could pose more of a threat to mass merchandisers such as Wal-Mart, Dean said.

“They've come very, very close to Wal-Mart's prices,” Dean said, noting that Target customers receive an additional 5 percent discount when they use one of its promotional debit or credit cards.

A Wal-Mart spokesman did not return calls for comment. But last August, Bloomberg News reported that Target had lower food prices than Wal-Mart for the first time in nearly a year and led by its widest margin since Bloomberg began its pricing study in 2010.

The Bentonville, Ark.-based retailer told Bloomberg that its competitors rely on pricing gimmicks during a single week or particular season instead of everyday low pricing.